Group 4

Semester 6

Yo Kai Sin

Nobert Voo

Chew Jun Ming

Munzir Akmal

Putri Razak

Qi Bing Duo

Khew Sze Hao

Semester 5

Haziq Zariful
Chua Jia Cheng
Vivian Tan
Khor Seem Leng
Cecilia Tie
Lau Sii
Stephanie Yeoh

Question 1
What are the essential
requirements for formation of
contract? Discuss whether a

binding and enforceable

contract has been concluded
between Jolly and Can-Do.

Offer
Section

2(a) of Contract Act 1950, defines that

when one person signifies to another his willingness
to do or to abstain from doing anything, with a view
to obtaining the assent of that other to the act or
abstinence, he is said to make a proposal.

The

offer (proposal) may be made to a single person

or to world at large.

Acceptance
Section

2 (b) of Contract Act 1950, states that

when the person to whom the proposal is made
signifies his assent thereto, the proposal is said to
be accepted: a proposal, when accepted, becomes
a promise
The offeree must agree to the terms of the offer
made by offeror.
The offeree must communicate his/her acceptance
to the offeror.

Consideration
An

act/forbearance of the one party on the

promise thereof is the price for which the
promise is bought.

mutual exchange which would be made

between the offeror and offeree.

Common

example of consideration: money,

goods and services

Intention to create legal

relationship
For

a contract to exist, the parties to an

agreement must intend to create legal
relations

Consideration

is often evidence of intention

Certainty
The

terms and regulations being made in

a contract should be stated clearly and
understood by the parties of the
contract.
If the agreement is not certain, it would
be no longer valid.

Capacity
For

a contract to exist, the parties must

have contractual capacity.

Any

contracts that are made by persons who

are lacking in legal capacity are voidable

An

exception to this rule arises when the

parties enter into a contract for
"necessities"

In order for the contract to be legally

enforceable, it must fulfill the six
requirements:

Offer Main Contractor offered the project cost of RM 80,800,800

and completion within 24 months

Consideration Jolly agreed to pay the offered amount by Can-Do

and Can-Do agreed to construct the work for Jolly within 24 months.

Intention to create legal relationship Jolly had requested Gulp to

write letter of intent to Can-Do to accept for the offer while waiting
for the letter of acceptance be issued.

Certainty There are clear terms and conditions stated in the

agreement between the parties.

Capacity Can-Do was chosen as the successful tenderer as it has

qualified after the tendering process.

However, the acceptance criteria has not fulfilled as the letter of

acceptance have not signed by Can-Do. Therefore, it is not a binding
and enforceable contract between Jolly and Can-Do until the LOA has
signed.

Question 2
Advise Jazzy on the validity of
Can-Dos claim for extension of
time and additional payment
arising from the collapsed
temporary works.

Extension of Time
Under PAM Contract 2006:
Contractual effect:
Can-Do (contractor) has no grounds to claim for any
extension of times because the relevant sub-clauses
have been deleted by Jolly (contractor)
Jolly (employer) instructed Gulp (QS) to delete the
sub-clauses on variations, delays, impediment and
prevention caused the employer which were
relevant events for the extension of the time for
completion.

Extension of Time
According to PAM Contract 2006,

Jazz should issue the written

notice of rejection for the
extension of time within six
weeks from the receipt of
sufficient particulars. Jazz
should also stating the reasons
for rejection.

Extension of Time
Under FIDIC :
Contractual effect:
Can-Do (contractor) has no grounds to claim for any
extension of times because the relevant sub-clauses
have been deleted by Jolly (the employer).
The deleted clauses to extend time may result in time
at large. Contractors obligations then is to complete
in a reasonable time.

Extension of Time
According to FIDIC,

Clause 20.1 states that Jazz

should respond with disapproval
comments within 42 days after
receiving a claim from
contractor.

Additional Payment
Under PAM Contract 2006:
Contractual effect:
Can-Do (contractor) is not entitle to claim
additional payment from the collapsed
temporary work because he only submitted
the claim for loss and expenses 40 days after
the event citing.

According to PAM Contract 2006,

According to clause 24.1 (a) , the contractor shall

give a written notice to Architect (Jazz) of his
intention to claim for loss and/or expenses together
with an initial estimate of his claim duly supported
with all necessary calculations. Such notice shall be
given within 28 days from the date of the AI, CAI or
the start of the occurrence of the matters.

Additional Payment
Under FIDIC :
Contractual effect:
In this case, the contractor fails to give notice
of a claim within such period of 28 days,
therefore the contractor shall not be entitled
to any additional payment.

According to FIDIC

According to the clause 20.1, the contractor shall give

notice to the Engineer, describing the event or
circumstances giving rise to the claim. The notice shall
be given not later than 28 days after the Contractor
become aware, or should have become aware, of the
event or circumstance.

Jazz should respond with disapproval comments within

42 days after receiving a claim from contractor.

Q3. How should Jazz respond

to
Can-Do with regard to the
latters claim for extension
of time for the delay caused
by the rain?

FIDIC
As

stated in the case, Jolly instructed

Gulp to delete the sub-clauses on
exceptionally adverse climatic conditions,
variations and delay, impediment and
prevention caused by the Employer which
are relevant events for extension of time.

Therefore,

Jazz should have rejected

Can-Do as there are no basis for Can-Do
to claim for EOT.

Provided that the clause is not deleted,

Jazz shall assess:

???

1.

Was progress affected? Yes. Delay of 7 days.

2.

What was the stage of works or site

condition on affected days? Works below
lowest floor finish and the site was flooded.

3.

What was the nature of works carried out?

Excavation works.

4.

Was continuance of work impracticable? Yes.

Site is flooded and cannot be excavated.

5.

Was completion delayed? Yes. Other works

cannot be done concurrently.

6.

Were steps taken to avoid or reduce the

delay? Not mentioned.

Clause 8.4 Extension of time

for completion

Contractor shall be entitled subject to sub-clause

20.1 to an extension of time for completion for the
relevant event (c ) Exceptionally adverse climatic
conditions.

Sub-clause 20.1 states if a contractor consider

himself to be entitled to any extension of time
and/or additional payment. He shall give notice to
the engineer not later than 28 days from the
aware of the event.

Engineer has 42days from receipt of fully detailed

claim to respond with his approval, disapproval or
detailed comments, and may also request further
particulars.

Jazz shall disapprove the application of Can-Do.

PAM
Clause

23.1 gives the contractor option to

claim for extension of time, the contractor
has to decide if in his opinion that the
completion of works is or will be delayed and
the cause of delay is a relevant event under
clause 23.8.

This

case is Exceptionally inclement

weather, clause 23.8(b).

The

contractor shall submit an application

within 28days of the end of caused of
delay. Which fails to submit within 28days
shall deem that the contractor has waived his
right to claim for extension of time.

The architect shall within 6 weeks

from the date of receipt of sufficient
particulars decide on either reject the
application or approve by granting an
EOT and issue certificate of EOT.

Which in this case, Jazz should reject

the contractor due to the submission
was made 40 days after the event.

Question 4 : Situation
Changes to
apartment
type mix

Requested

Jolly (Client)

Can-Do

Argued

(Contractor)

There were not

prepared to
carry additional
changes
instructed.
Since the Time
of Completion
had expired
unless EOT is
granted.

Question 4
If the standard form of contract is the
Agreement and conditions of PAM Contract
2006 (Without Quantities),

Advise Picasso (Architect), on the

procedure for dealing with the extension
of time arising from instruction for further
changes to apartment type mix and

How they should respond to the request

from Can-Do(Contractor) since the
Completion Date has passed and
Certification of Non-completion has
already been issued.

According to PAM Contract 2006 Clause 11.1, the changes to

apartment type requested by Jolly is a variation work.

Under Clause 11.3, Picasso (Architect) may issue instruction in

writing requiring a Variation at any time before the issuance
Certificate of Practical Completion. Since CPC is not yet issued,
therefore any AI requiring Variation must be necessitated by
obligations. Hence Can-Do must comply with AI under Clause 2.1.
Under Clause 23.8(g), AI for variation is one of the relevant
event that entitled contractor to claim for EOT and Jolly (Client)
cannot imposed liquidated damages because is a delay caused by
employer.
Under Clause 23.9, EOT can be granted even after the CNC was
issued to Can-Do, the CNC issued early should be revoked under
Clause 22.3 and a new completion date is fixed. If contractor
again fails to complete by the new completion date, architect
should issue a new CNC.

HOWEVER
Jolly (Client ) had instructed Gulp (Qs) to delete the
sub-clauses on variation and delay from the relevant
events to ensure contractor has no ground to claim EOT.
Hence, Picasso has no right to approve EOT to Can-Do.
The only remedies might be to find another contractor
to execute the variation works.

Question 5
Advice Jolly on the
contractual implications of
replacing Er Jazzy and
appointing their own
employee, Er Jo-Jo, as the
name Engineer.

FIDIC Form
Clause
1.1.2.4

Engineer:
is the person appointed by employer to exercise the power on behalf of
employer.
a decision maker holding balance between employer and contractor on
matters of opposing interests.

SubClause
3.5

Engineer:
In determinant of any matter, the Engineer shall consult with each party in
endeavour to reach agreement.
If agreement is not achieved, then he shall make fair determination in
accordance with the Contract, taking into consideration of all relevant
circumstances.

SubClause
3.4

Engineer
if employer intends to replace the engineer , the employer shall, not less
than 21 days before the intended date of replacement, give notice to the
contractor [ name, address and relevant experience of intended
replacement Er]
Contractor have rights to raise reasonable objection by giving notice to
the employer with supporting particulars.
Employer to give full and fair considerations.

PAM Form

Clause
23.8 (r)

Any appointment of
replacement person under
Articles 3,4,5 & 6, the
contractor is entitled to
extension of time.

Clause
24.3 (r)

Any appointment of
replacement person under
Articles 3,4,5 & 6, the
contractor is entitled to loss
and expense .

Conclusion
Jolly cannot Why?
replace Er
Jazzy and
appoint their May not allow the
engineer to make
own
fair determination
employee Er and act firmly in
making decisions.
Jo Jo.

Results may be
biased, more
advantages
towards employer.

Notice of intention to
replace the engineer
must be given to the
contractor not less
than 21 days before
the intended date of
replacement with
name, address and
relevant experience of
the engineer.

FIDIC FORM

Summary of Ques 5
A) Clause 23.8 (r)Extension of time
( Relevant Event)
B) Clause 24.3 (i)Loss and Expense
( Matters materially
affecting the regular
progress of the
works)

PAM CONTRACT

A)Clause 1.1.2.4- Parties

and person
B) Clause 3.5Determinants
C) Clause 3.1- Engineers
Duties and Authority
D) Clause 3.4Replacement of Engineer

Question 6:
Discuss the procedure and
consequences for suspension of
the works. Answer the question
on the assumption that you are
the named Engineer and has
issued an instruction to Can-Do to
suspend progress of the works.

FIDIC Contract
Sub-clause 8.8 EI to suspend progress of work or certain parts
of the work
Contractor protect, store and secure Works against loss or
damage.
If suspension > 84 days, contractor request for engineers
permission to proceed
Engineer gives permission within 28 days for works to
recommence
If failed to do so, suspended portion will be omitted from the
works
If whole of the works suspended, Contractor terminate
contract immediately; claim for additional cost

FIDIC Contract
Sub-clause 8.9 If the Contractor suffers delay or
incurs cost from complying with the instruction,
Contractor shall be entitled subject to Sub-Clause
20.1 [Contractors Claim] for EOT or payment for any
such cost by giving notice to Engineer.
After receiving such notice, Engineer shall proceed to
assess these matters in accordance with Sub-Clause
3.5 [Determination].
If it is the Contractors fault for suspension of the
works, he shall not be entitled to EOT or payment of
Cost incurred.

PAM Form of Contract

Clause 2.1 Contractor shall comply with AI.
Clause 2.4 If contractor fails to comply with AI,
Employer may employ other Person to execute any work.
Clause 21.4 The Architect may instruct to postpone or
suspend all or part of the Works for a continuous period
not exceeding Period of Delay stated in the Appendix (3
months if none stated).
Contractor shall ensure full insurance coverage for the
whole period of suspension under Clause 19.0 & 20.A, or
covered by Employer under Clause 20.B or 20.C.

PAM Form of Contract

Clause
23.8(g)

Contractor may apply for EOT if in his opinion

that the completion of works is or will be delayed
beyond the Completion Date by complying with
the AI for suspension of works.

Clause
24.3(c)

Contractor shall be entitled for loss and expense

claim for compliance with AI to suspend the works
to be executed under Clause 21.4.

If the period of suspension is extended further,

contractor might entitled to termination of
contract and claim for additional cost.

QUESTION 7
Advice Gulp on how they should
respond to Jollys instructions
during the tender documentation
period on the sub-clauses to be
deleted in the contract form.

FIDIC Contract
Gulp should advise Jolly as follows:
If the sub-clauses that are relevant for extension of time were
to be deleted, time cannot be extended if there is any delay
caused by employer or neutral events, and time will be at large.
When time is at large, the original date of taking-over no longer
applies.
If the Employer defaults and caused delay, there is no
mechanism in the contract to extend time and fix new Time for
Completion.
No definite Time for Completion to work towards
Contractor is only required to complete within reasonable time
as assessed by engineer
Employers right to claim delay damages no longer applies
Contractor finishes later than reasonable time, employer
entitled to common law damages provided such losses are actual
and proven.

If there are EOT provisions: Sub-Clause 8.4 Contractor shall be entitled subject to SubClause 20.1 for an extension of Time of Completion for delay
caused by relevant events of sub-clauses 8.4(a) to 8.4(e).
New Time for Completion can be fixed
Protect Employers right to recover delay damages for neutral
events or employer-responsible events
Prevents time for completion for being at large
In the case of PAM Form of Contract 2006, Clause 23.0 is
applicable for extension of time claim.
Therefore, Gulp should advise Jolly not to delete the sub-clauses
related to EOT from the contract form due to the implications
mentioned above.

Question 8
In the event Can-Do becomes insolvent, how
would you advise Jolly on the implications
and arrangements for completing the works
and recovering delay damages, the losses
and expenses incurred and the extra costs in
having the works completed by another
contractor?

Under PAM Form 2006

Clause 25.3 states that In the event of the Contractor
becoming insolventthe employment of the Contractor
shall be forthwith automatically determined.

ADVICE to JOLLY

Jolly is advised to notify Can-Do in writing, that the his employment has
been determined in accordance with Clause 25.3.

Can-Do shall vacate the Site and return possession of the Site to Jolly
within 14 Days from receipt of Notice of Determination under Clause 25.7.

Jolly has the right to employ and pay other persons to carry out and
complete the Works.

Under PAM Form 2006

ADVICE to JOLLY

Jolly has the right to use any temporary buildings, construction

plants, and tools on the Site belonging to Can-Do, except
construction plants hired by Can-Do under Clause 25.4(a).

Jolly can also instruct Can-Do to remove any or all facilities from
site within a reasonable time under Clause 25.4( c ).

Can-Do must pay for all cost incurred to complete the Works
including all loss and/or expense suffered by Jolly. Jolly is not
bound to make further payment to Can-Do, including payments
which have been certified but not yet paid under Clause 25.4(d).

Under FIDIC
Sub-Clause 15.2 states that The Employer shall be entitled to terminate the
Contract if the Contractor becomes bankrupt or insolvent, goes into liquidation,
has a receiving or administration order made against him The Employer may by
notice terminate immediately.

ADVICE to JOLLY

Jolly as the employer may by notice terminate immediately.

Can-Do shall then leave the Site and deliver any required Goods, all
Contractors Document, and other design documents made by or
for him, to the Engineer, Jazz.

After termination, Jolly may arrange for any other entities to

complete the Works.

Under FIDIC
ADVICE to JOLLY

After a notice of termination under Sub-Clause 15.2 [Termination

by Employer] has taken effect, Jolly may withhold further
payments to Can-Do until the costs of execution, completion and
remedying of any defects, damages for delay in completion (if
any), and all others costs incurred by Jolly, have been established.

Jolly can recover from Can-Do any losses and damages incurred by
Jolly and any extra costs of completing the Works, after allowing
for any sum due to Can-Do under Sub-Clause 15.3 [Valuation at
Date of Termination].

After recovering any such losses, damages and extra cost, Jolly
shall pay any balance to Can-Do.

Question 9

Advise Jazz on the manner in which the

extension of time was purportedly given
for the reconfiguration of the bedrooms.

PAM Form Contract.

Clauses 23.0 Extension of Time
Contractor are not entitled to claim for Extension of Time because;
PAM Form Contract
Clauses 23.1 (a) the Contractor shall give written notice to the Architect his
intention to claim for such extension of time. Such notice must be given within
twenty-eight (28) Days from the date of the AI, CAI or the commencement of the
Relevant Event, whichever is earlier. The giving of such written notice shall be a
condition precedent to an entitlement of extension of time.
- Can-Do are not entitled to Extension of Time because to claim an Extension of
Time, the notice must be give within twenty-eight (28) Days from the date of the
Relevant Event.
- The Can-Do gave the notice of delay 6 month after the variation works were
ordered, which do not within the twenty-eight(28) Days stated in Clauses 23.1(a).

Clauses 23.0 Extension of

Time
If the sub-clauses are not deleted. Contractor are entitled to claim for Extension
of Time because;
PAM Form Contract
Clauses 23.1 If the Contractor is of the opinion that the completion of the Works is
or will be delayed beyond the Completion Date by any of the Relevant Events stated
in Clauses 23.8, he may apply for an extension of time provided always that:

Can-Do are entitled to claim for Extension of Time if the reason was fall under
the Relevant Event stated in Clauses 23.8.
Clause 23.8 (m)- any act of prevention or breach of contract by the employer.

Jolly prevent the Can-Do to proceeding to existing work due to the variation
work to the bedroom.

The act of prevention by Jolly caused the Can-Do delays the Completion of Time.

Can-Do entitled to claim for Extension of Time if it is the fault of Jolly.

Clauses 23.0 Extension of

Time
To claim for Extension of Time the Contractor must comply with this clauses;
PAM Form Contract
Clauses 23.1 (a) the Contractor shall give written notice to the Architect his
intention to claim for such extension of time. Such notice must be given within
twenty-eight (28) Days from the date of the AI, CAI or the commencement of the
Relevant Event, whichever is earlier. The giving of such written notice shall be a
condition precedent to an entitlement of extension of time.

Can-Do must give a written notice of delay to Jazz his intention to claim for
Extension of Time and the notice shall be given within the 28 Days from the
date of Relevant Events commence.

The written notice is condition precedent for the Can-Do to entitled to claim
for Extension of Time.

Clauses 23.0 Extension of

Time
To claim for Extension of Time the Contractor must comply with this clauses;
PAM Form Contract
Clauses 23.1 (b)- within twenty-eight (28) Days of the end of the cause of delay,
the Contractor shall send to the Architect his final claim for extension of time
duly supported with all particulars to enable the Architect to assess any extension
of time to be granted. If the Contractor fails to submit such particulars within the
stated time (or within such longer period as may be agreed in writing by the
Architect), it shall be deemed that the Contractor has assessed that such
Relevant Event will not delay the completion of the Works beyond the Completion
Date.
-Jazz shall make his decision whether to grant the Extension of Time or reject it
within 28 Days of the end of cause delay.

Clauses 23.0 Extension of

Time
Contractor are not entitled to claim for Extension of Time because;
PAM Form Contract

Standard form of contract which can be amend by employer by add or omit

the clauses from the contract.

The Contractor are not entitled to claim for Extension of Time due to the
employer deleted the sub-clauses was included with delay caused by
employer which relevant event do not entitle the contractor to claim for
Extension of Time.

FIDIC Contract
Clauses 20.1 - Contractor Claim
If the Contractor fails to give notice of a claim within such period of 28 days, the
Time for Completion shall not be extended, the Contractor shall not be entitled
to additional payment, and the Employer shall be discharged from all liability in
connection with the claim. Otherwise, the following provisions of this Sub-Clause
shall apply.

The contractor fail to give notice of delay within 28 Days.

Can-Do give notice after 6 months.
Can-Do is not entitled to claim for Extension of Time.
Can-Do submitted his notice of delay after variation works ordered.
Jolly is not obligated to approve the Extension of Time for Completion
requested by Can-Do.

Clauses 8.4 Extension of Time for Completion

The Contractor shall be entitled subject to Sub-Clause 20.1(Contractor's Claims) to an extension
of the Time for Completion if and to the extent that completion for the purposes of Sub-Clauses
10.1 is or will be delayed by any of the following causes;

variation (unless an adjustment to the Time for Completion has been agreed
under Sub-Clause 13.3 [Variation Procedure] or other substantial change in the
quantity of an item of work included in the Contract.
(b) a cause of delay giving an entitlement to extension of time under a SubClauses of these Condition.
(a)

Can-Do

was instructed by Jolly to reconfiguration the bedroom, which act as a

variation works to the Can-Do and caused him to delay the Time for
Completion.
The variation work will affect the structural work and result the contractor
cannot complete on time.
Under this clauses, Can-Do are entitled to claim Extension of Time for
Completion.

Question 10:
a)

Advise Jazz on what they have to do and on the

consequential effects if Jolly wishes to take over part of the
works before completion of the whole works.

b)

If the contract form is the Agreement and Conditions of PAM

Contract 2006 (With Quantities), how will you advise Picasso?
Answer the question on the assumption that no certificate of
Non-Completion has been issued by Picasso.

Under FIDIC
ADVICEs to
Picasso

If Employer wishes to take over part of the work before completion of

the works, Employer has to inform Contractor.

Contractor may apply notice to Engineer for a Taking-Over Certificate not

earlier than 14 days before the Works.

Clause 10.1 (a) After receiving the contractors application, Engineer

shall issue the Taking-Over Certificate to the Contractor within 28 days
and stating the date on which the Works or Section were completed in
accordance with the Contract.

Under FIDIC
ADVICEs to
Picasso

The consequential effect under clause 10.2 (a); (b); and (c), the part which is used shall be
deemed to have been taken over as from the date on which it is used.

The Contractor shall cease to be liable for the care of such part as from this date, when
responsibility shall pass to the Employer, and if requested by the Contractor, the Engineer
shall issue a Taking-Over Certificate for this part.

The Contractor will be entitled subject to Sub-Clause 20.1 [Contractor Claims], if the
Contractor incurs the cost.

The Engineer shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or
determine this Cost and profit.

The delay damages there after for completion of the remainder of the works shall be
reduced.

Under PAM Form 2006

ADVICEs to
JAZZ

Clause 16.2, the Employer only has the right to possess without the
consent of the Contractor under following clause 16.2 (a) and (b).

Due to the condition of Mr Joll made surprise visit to the site and
furious at the slow patchy progress and shoddy workmanship, Mr Joll
had decided to ask Engineer to omit some portions of the work.

With the conditions, there is no Certificate of Non-Completion has

been issued. Therefore, if the Employer possess without the consent
of the contractor will be breach of contract.

Under PAM Form 2006

ADVICEs to
JAZZ

Under Clause 16.1, the consent of the Contractor has to obtain as the
Employer wishes to take possession and occupy any part of Works.

Picasso as an architect shall issue a Certificate of Partial Completion

under clause 16.1 (a), within fourteen (14) Days from the date on
which the Jolly has taken possession of the Occupied Part.

The Certificate of Partial Completion shall state the Architects

estimate of the approximate total value of the Occupied Part and for
all purposes of Clause 16.0, the value so stated shall be deemed to be
the total value of the Occupied Part.

Question 11:
Discuss Jazzs action to issue an instruction to omit
portions of the works from Can-Dos contracted
scope so that another contractor can be engaged
to carry out the omitted portions.

Under PAM Form 2006

JAZZs
ACTIONs

Under the clause 11.1 omission is not allowed unless the

Employer finds valid reasons to determinate the Contractor.

By using determination of the contract in clause 25.4(a), the

Employer are entitled to determinate the Contractor and
required him/her to vacate the site. After that, Employer
entitled to employ a new Contractor to complete the work.

Under FIDIC

Under fidic form of contract, clause 13.1 (c) changes to the

levels, positions and/or dimensions of any part of the works.

JAZZs
ACTIONs

The reason given by the employer to omit portions of the works

is valid for omission, due to the fact that Contractor
workmanship is poorly being done and behind scheduled.

Omission is to reduce the work load of the Contractor, but not

for a cheaper price.

Question 12 - FIDIC

Advise Jolly (employer) on their rights in respect of the

failure of the membrane roofing works

Question 12 - FIDIC
Advise Jolly (employer) on their rights in respect of the failure of the membrane
roofing works
Scenario
They were found to be caused by poor workmanship and failure of the membrane roofing.
Contractor refused to attend the defective roofing works;
a.

DNP has expired long time ago.

b.

Performance Certificate is over.

_______________________________________________________________________________
According to FIDIC Condition of Contract,

Clause 11.4 - failure to remedy defects

If the Contractor fails to remedy any defect or damage within a reasonable time, a date may
be fixed by (or on behalf of) the Employer, on or by which the defect or damage is to be
remedied. The Contractor shall be given reasonable notice of this date. If the Contractor fails
to remedy the defect or damage by this notified date and this remedial work was to be
executed at the cost of the Contractor under Sub-Clause 11.2 [Cost of Remedying Defects], the
Employer may (at his option):

Question 12 FIDIC
Advise Jolly (employer) on their rights in respect of the failure of the membrane roofing works (cont.)

The contractor should remedy to the defective works by the Defects Liability Period (Clause 11.4).

Unfortunately, Mr Jolly cannot claim any damages due to DNP has long expired and Can-Dos
obligations were over as evidenced by the Performance Certificate.

Mr Jolly made a surprised visit to the site accompanied by Bang Bang and he found out that,
the workmanship by Can-Do was shoddy. But he did not ask the engineer to issue DNP to the
contractor. If he did, Mr Jolly would have been able to ask Can-Do to remedy the issue.

He also could have issued a notice to Extension of Defects notification period which must have
been issue before the expire (clause 2.5)
Clause 2.5 Employers Claim
The notice shall be given as soon as practicable and no longer than 28 days after the
Employer became aware, or should have become aware, of the event or circumstances giving
rise to the claim. A notice relating to any extension of the Defects Notification Period shall be
given before the expiry of such period.

Question 12 (PAM 2006 without quantities)

Advices Jolly on their rights in respects of the failure of
the membrane roofing works.

Under PAM contract,

The employer can issue an instruction to rectify the

defects.

Under clause 15.4, any defects in the works which appear

within the Defects Liability Period shall be specified by
the Architect in a schedule of defects that shall be
delivered to the contractor not later than 14 days after
the expiration of Defects Liability Period.

In this case, the Defects Liability Period has expired and

Contractor has no longer obligated to make such defects.

Question 13

What are the duties and obligations of Jazz and Can-Do

following receipt of the notices from the letter on their
claim for extension of time and additional payment?

Can-Do :
Clause 20

Contractor must submit their notice to claim for extension of time within 28 days after the
event causing the delay.

Failure to give notice, under clause 20.1, contractor is not entitled to additional payment.

Within 42 days contractor shall send to the engineer a fully detailed claim.

Jazz :
Clause 20
Within 42 days after receiving a claim engineer shall response with approval or disapproval.

According to clause 20.1 the notice shall be given as soon as practicable and not later than
28 days after the contractor became aware, or should have become aware, of the event or
circumstances.

If the contractor fails to give notice of a claim within 28 days the time for completion shall
not be extended, the contractor shall not be entitled to additional payment.

Can-Do

According to PAM Contract 2006 (without quantities)

Clause 23.1(a) & (b) give a 2-step procedure:

1)

Contractor to give written notice of intention to claim within 28 days from commencement of
relevant event. This written application is a condition precedent to any EOT.

2)

Contractor to submit subsequent official application and substantiation of claim within 28 days of
end of cause of delay.

Clause 23.6 stated that

He shall constantly use his best Endeavour to prevent or reduce delay in the progress of the Works, and
to do all that may
reasonably be required to the satisfaction of Jazz to prevent and reduce delay or further delay in the
completion of the Works
beyond the Completion Date.

Jazz

According to PAM Contract 2006 (without quantities)

Clause 23.4 cert. of EOT
Issue of the Certificate of EOT
After he has completed his assessment, he has to make either of 2 decisions:
a.Reject the contractors application, stating the reason; or
b.Grant EOT and issue Certificate of EOT
Timing of issue
Within 6 weeks from the receipt of sufficient particulars.
If jazz fails to issue EOT within 6 weeks, he shall inform Can-Do for an extension and get
his
concern; or
If Jazz fails to determine the EOT required, he may issue a provisional EOT and
leave it for review after practical completion based on clause 23.10

According to Clause 23.5

23.5 (a) the effect or extent of any work omitted under
the Contract, provided always Jazz shall not fix a
Completion Date earlier than the Completion Date stated
in Appendix; and
23.5(b) any other Relevant Events which Jazzs opinion will
have an effect on Can-Dos entitlement to an EOT.

Q14

If the standard form of contract is the Agreement

and Conditions of PAM Contract 2006 (With
Quantities), discuss the rules to be considered by
Gulp (in their capacity as the named Quantity
Surveyor) when valuing the variations relating to
the reconfiguration of the bedrooms.

Clause 11.6: Rule of variations

Clause 11.6a

Where the varied work is of similar character executed under similar condition, the work price
or rate in the contract shall be used for the valuation.

Clause 11.6b

Where the varied work is of similar character to work included in the contract but not
executed under similar condition, the work price or rate in the contract shall be used for the
valuation with fair adjustment

Clause 11.6c

Where the varied work is not of similar character, or not executed under similar condition, the
valuation shall be at a fair market rates and prices. The BoQ rates shall be the basis of rates for
the valuation.

Clause 11.6d

Where the varied work cannot be properly measured and valued or when the above rules are
inapplicable or inappropriate in the circumstances, the valuation shall be based upon daywork
rates or prices.

Clause 11.6e

Where the varied work involves items to be omitted, the rates or prices in the contract shall
determine the valuation of items omitted. If omissions substantially vary the conditions under
which any remaining items of work are carried out, the rates or prices of such remaining items
shall be valued under clause 11.6a,b,c

Key words

About 10 months into the Time for Completion and after

all the structural works have been completed, Jolly
requested for all the bedrooms to be reconfigured
affecting the constructed structural works at the
topmost 5 floors.

Can-Do submitted their variation claim for changes to

the structural works of the affected floors to Gulp who
assessed it using similar contract rates.

Gulp valued the variation by applying the contract unit

rate

QUESTION 15

You have been requested jolly to assist in drafting the

letter of acceptance. On the assumption that the
contract form is the Agreement and Conditions of PAM
Contract 2006 ( With Quantities), prepare a draft letter
of award to be issued by Picasso and present to the class.

Question 16A

Outline the procedure that Jazz and Can-Do must

comply with when dealing with the claim for additional
payment arising from the collapsed temporary works.

Clause 20.1: Contractors Claim

Unforeseeable Physical Conditions Flowchart
Adverse
physical
condition

Notifies
engineer

Give notice to
engineer

Sub-clause
20.1 claim
procedure
applied

No
No EOT
EOT
No
Additional
No Additional cost
cost
Employer
not
Employer not
liable
liable

Is the
conditions
unforeseeable
?

Claim
Claim rejected
rejected

Question 16B

If the contract is the Agreement and Conditions of PAM

Contract (With Quantities), how will you advise Picasso
and Can-Do on the claim for loss and expense?

Clause 24.3: Loss/expense Caused by Matter Affecting Process of Work

Flowchart in claiming loss/expense

Works has been or

likely materially
disrupted

Notifies architect

Give notice to
architect

Architect shall
ascertained such
amount and issue in
interim certificate

No
No EOT
EOT
No
Additional
No Additional cost
cost
Employer
not
Employer not
liable
liable

Is the delays caused

by event in clause
24.3

Claim
Claim rejected
rejected

14 Relevant Events Listed Under Clause

24.

a) late issue of AI

b) delay in giving site possession

c) suspension of works by employer

d) delay by employers licenses

e) delay to supply materials by employer

f) opening up for inspection and testing

g) act of prevention or breach by employer

h) discovery of antiquities

i) appointment of a replacement consultant

j) dispute with neighbours

k) execution of works under provisional quantity

l) failure to give entry and exit

m) Suspension of works for non-payment and withdrawal of supervision

n) Suspension of work by an Appropriate Authority.

The differences in FIDIC and PAM in

claim
FIDIC

Differences

PAM

Engineer

Who assess the

claim

Architect

It is sent not more

than 28 days after it
become aware or
should become
aware

When should the

notice send?

It is sent not more

than 28 days at
commencement of
the delay

The delay as caused

due to unforeseen
condition

Claim condition

The delay was

caused by the
relevant events in
clause 24.3

This formal
application shall be
submitted within 42
days after the
contractor became
aware of the rising
of the events.

Submission of
Detailed claim

This formal
application shall be
submitted after the
28 days of
completion of the
relevant matters.